While others in the market may wonder if they should be underwriting rents in excess of $100 per square foot, Mr. Michaels looks to other major global cities to compare.

He uses a CB Richard Ellis survey to see that the average occupancy cost in New York is $62, but in London’s West End it is $212 and Tokyo’s inner city is $145.

He also compares the cap rates in Tokyo, London, Madrid, Paris and New York. Tokyo is at a 3% cap rate. London, Madrid and Paris are at a 4% cap rate. With New York at a 6% cap rate it ranks cheaper than other major cities.

I previously pointed out stories about changes in the markets that impact real estate prices. Mr. Michaels thinks they are still comparatively cheap.